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Service on the rise, agriculture and manufacturing in decline: The labor market effects of high-speed rail services in Spain

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  • Zhang, Yuxin
  • Xu, Dafeng

Abstract

High-speed rail (HSR) provides fast passenger services that could benefit certain businesses in the service sector but may cause relative declines in employment in agricultural and manufacturing sectors. We present a case study of the labor market in contexts of Spain—with a service-dominated economy and a smaller but significant manufacturing economy—by exploiting variations in the location of HSR services and the timing of their establishment. Using Spain’s labor force survey data, we employ difference-in-differences models to estimate the effects of HSR services on proportions of workers by economic sector in Spain at the province level. The main results suggest that, while there are national trends in rising service employment and declining manufacturing and agricultural employment, such trends are more significant in Spain’s HSR provinces after—and only after—HSR begins to operate. The labor market effects of HSR services are most likely to be driven by workers’ job changes across economic sectors, i.e., agricultural and manufacturing workers shift to the service sector; we find no significant evidence that HSR services create new employment, change patterns of labor force participation, cause international and internal labor migration, or affect local workers’ human capital characteristics.

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  • Zhang, Yuxin & Xu, Dafeng, 2023. "Service on the rise, agriculture and manufacturing in decline: The labor market effects of high-speed rail services in Spain," Transportation Research Part A: Policy and Practice, Elsevier, vol. 171(C).
    • Handle: RePEc:eee:transa:v:171:y:2023:i:c:s096585642300037x
    DOI: 10.1016/j.tra.2023.103617
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